BAT projects saving at least $400 million a year through cost-cutting of corporate operations, increased purchasing power, and other efficiencies.

Each Reynolds share will convert to $29.44 in cash and about half a share in BAT. The British company says the price is nearly 40 per cent above the value of Reynolds’ shares before its earlier, unsuccessful purchase offer in October.

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3:40 a.m.

Shareholders of British American Tobacco and Reynolds American Inc. were scheduled to decide Wednesday whether to approve a merger that would create the world’s largest publicly traded tobacco company.

If approved during separate shareholder votes, the deal is expected to become effective next week.

London-headquartered BAT will buy the 57.8 per cent of Reynolds it does not already own. Reynolds shareholders will receive for each share $29.44 in cash and 0.5260 BAT shares.

The $49 billion cash-and-stock offer announced in January valued each Reynolds share at $59.64, up from $56.50 offered in October.

BAT sells Dunhill, Rothmans and Lucky Strike cigarettes. The company said its cigarettes reach about 12 per cent of the world’s one billion smokers.

Reynolds traces its roots to 1875, when Richard Joshua Reynolds started a chewing tobacco company in the city that has been its headquarters since. The takeover marks an end for what became R.J. Reynolds Tobacco, which stamped its home state of North Carolina as a centre during a bygone era of smoking’s popularity through its Winston and Salem brands.

The company’s links with British American Tobacco date to 2004, when R.J. Reynolds Tobacco Co. merged with BAT’s Brown & Williamson unit, creating Reynolds American. The two companies already have a technology-sharing agreement in the development of electronic cigarettes.